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Consumer

Governor Plans To Divert Foreclosure Settlement Money For Budget

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A foreclosure sign hangs on a fence in front of a foreclosed home on April 6, 2011. (Justin Sullivan/Getty Images)

A foreclosure sign hangs on a fence in front of a foreclosed home on April 6, 2011. (Justin Sullivan/Getty Images)

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SAN FRANCISCO (KCBS) – Some agencies that help struggling homeowners in the Bay Area said a plan to take funds from a major foreclosure settlement to plug the state’s budget hole could leave them more vulnerable to scams.

Earlier this year, Attorney General Kamala Harris announced a hard-fought settlement with the five big mortgage banks.

KCBS’ Margie Shafer Reports:

“We have delivered to California $18 billion in relief for California homeowners,” she said.

But now Governor Jerry Brown has announced that, with the okay from the California Legislative Analyst’s Office, he plans to use $411 million of that money to pay interest on housing bonds and fund anti-discrimination programs.

Harris had slated for that money to be used for enforcement and assistance to local housing organizations to confront fraud.

The plan concerns Josie Ramirez with Homeownership San Francisco, who said clients are regularly approached by scam artists promising a quick fix to a mortgage issue for a fee.

“People who are desperate looking for help, they’ll believe them,” said Ramirez. “I just wish the politicians that think the market is turning around, they could come over here to the Bayview-Hunter’s Point area and see all the foreclosures.”

The majority of the settlement money is slated for direct assistance for borrowers.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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